ALBANY, N.Y. — Eight eBay sellers were ordered to pay nearly $90,000 (all figures U.S.) in restitution and fines after admitting they bid up products online to inflate the prices. New York Attorney General Eliot Spitzer said more than 120 people will receive restitution in the settlement of the three cases, which wrapped up last week in state courts. Spokesperson Darren Dopp said the cases stemmed from specific complaints, but the office has not conducted a broad investigation of the online auction industry and doesn't know how widespread the practice of phoney bidding is. One buyer, Brad Clarke, 48, of Peachtree City, Ga., already has received a cheque for $3,089 after overpaying for a 1999 Jeep Cherokee sport utility vehicle he bought on eBay from a New York seller in 2002. "I'd always been suspicious because it seems like an easy thing to do, to just keep bidding up," Clarke said. "But I was still just completely shocked and very surprised." Three sellers were accused of making 610 bids on 106 of their car auctions under the user name Mother's Custom Automotive NY Dealer. They are paying more than $28,000 in penalties and restitution, Spitzer said. Their lawyers declined to comment. In another case, the operator of an art auction house and two former employees were accused of bidding on more than 1,100 of each others' eBay items for more than five years to drive up the prices. Some paintings sold for thousands more than they were worth. Spitzer said one of the sellers pleaded guilty to a felony charge, the other two to misdemeanours. They were ordered to pay more than $50,000 in restitution and fines. The other two defendants were accused of making 170 phoney bids on their sports memorabilia items. They agreed to pay $10,000 in penalties and restitution.
Even though shilling is wrong and by no means am I condoning it but, overpaying in an auction or in any sale is the buyers fault. One more example of blaming someone else for your own stupidity.
I agree completely. The buyer must protect themselves with knowledge. The auction environment can be intimidating. People tend to get caught up in the excitement and next thing you know, you are paying too much. I see this regularly in live auctions. Reguardless of where you buy your material, the same basic rules will always apply. Know your priduct, know your seller, and most importantly, know thyself.
While I absolutely agree that each bidder has an obligation to bid responsibly and within the confines of what they perceive is a reasonable price for an item, shill bidding eliminates the possibility of getting any kind of a deal and still forces an interested buyer to pay more than would have been necessary to win the auction. In essence, this is theft. The seller is creating his own demand for his supply and the bidder suffers. Even if it wasn't specifically stated in eBay's rules, shill bidding is unethical and I firmly believe that restitution from those involved is a step towards eliminating shill bidding. We had a client who decided, after having a few drinks on a Friday night, to bid on his own items to raise the price. We shut down the auctions immediately and told him that if it happened again, his items would be returned and our consignment contract would be void. In essence, shill bidding allows a seller to set a reserve price without paying the fees associated with setting a reserve. Sorry, but I don't need my competition getting an edge over me in the market because he has a buddy who will bid his auctions up. Just my two cents.
